Monday, November 26, 2012

To conservatives like me, the following proposal for raising taxes on Hollywood celebrities goes against my DNA. However, two facts are indisputable: (1) Hollywood is perhaps Obama's biggest booster club, giving him donations in kind and in dollars, and (2) Congress' stated goal is to raise taxes on the wealthy, although they will actually raise them on everyone.Therefore, with a bit of irony in mind, I propose the following for debate.

After listening to Democrats argue that
the wealthy aren’t paying their fair share of taxes, it’s time for Americans to
take an empirical view of the massive wealth accumulated by Hollywood
celebrities at the expense of their fans, and at a great loss to the government
coffers.

Since large numbers of celebrities are
Democrats and they cheerfully endorse Barack Obama’s tax policies, shouldn’t
it be incumbent upon them to lead by example?With this idea in mind, and in the spirit of patriotic
bipartisanship, we should push Congress to levy special taxes on the giant honey
pots in Hollywood, New York, and elsewhere.The fiscal cliff is looming, so our government needs
to devise many ways to satisfy our legislators’ unquenchable thirst to tax and
spend.

As the table below of extraordinary net
worth reveals, one could argue that celebrities must be picking our pockets
every time we enter a theater or purchase music and videos.

If celebrities are so proud
of the wealth they have accumulated at our expense, and at the same time
believe only they are champions of the poor, then they should be willing to
share their wealth with others.This is especially true because their redistributionist hero, President
Barack Obama, claims they didn’t build their success
with their hard work and talent alone.

Following Obama’s lead, the question we
should ask is, how much is too much for celebrities to earn?Obama believes
that “at a certain point, you’ve made enough money,” so shouldn’t celebrities
be held to a fairer maximum salary, like the one Obama suggests for other
industries? Celebrities may party with Obama, but an exception for them
wouldn’t be fair to the rest of us.Surprisingly, Roseanne Barr believes that no one should be allowed to earn
more than $100 million.As a
celebrity who should exemplify self-loathing, Michael Moore hates
the capitalist system, yet he proudly rakes in the money.

Let’s put the issue of wealth into
perspective by comparing the net worth of celebrities versus a few national political figures.Why should celebrities be
wealthier than the supposedly smartest people in government, such as Vice
President Joe Biden, U.S. Treasury Secretary Timothy Geithner, and Ben
Bernanke, Chairman of the Federal Reserve?These gentlemen are working very hard to control the entire U.S.
economy.

It is embarrassing that after 40 years
in government, Biden’s
net worth is only $500,000,while Geithner
and Bernanke
are slightly better with a net worth of $2 million each.In Hollywood, $2 million is chump
change, and $500,000 is pocket lint.Regardless of the immense brainpower and
responsibilities of these bureaucrats, celebrities have been far more
successful at improving their personal net worth.In a redistributionist scheme, this simply isn’t
right.

The only fair way to balance the scales
of financial justice between celebrities, the bureaucrats, and tax-paying
citizens is to levy a Federal excise tax on the entertainment industry.Furthermore, we can tax them with
a clear conscious, because the industry is said to be “depression proof.”

Despite economic recessions, the movie industry
generally continues to attract sizable audiences to theaters -- and the
business has been called “depression proof,” owing to the fact that, even
during the depths of the Great Depression, movie-goers numbered between 60 and
80 million Americans per week (when the US population was about 122 million).

Also:

According to PwC reports that include movie
revenues beyond just box office ticket sales, the film industry has grown
worldwide by almost 6% over the five-year period from 2005 to 2010, exceeding
approximately $82 billion in value.For an industry that claims to be plagued by piracy, this steadfast
level of growth during the Great Recession appears to justify the boastful
statements of being recession proof.

Let’s not forget about the adult film
industry, which TechDirt estimates to be valued at $4 billion. This is a medium that is ripe for
extra-special taxation.

As for the music industry, the same
report says:

On the consumption side, music is also being
consumed at near record-setting levels.According to Nielsen SoundScan figures, the overall
sale of music (including albums, singles, digital tracks, etc) exceeded 1.5
billion transactions in 2010 . . . These overall sales figures seem to rise and
fall a bit over the years, but they don’t necessarily drop during economic
recessions.

Live music also brings in huge amounts
of money to celebrity performers:

From 1999 to 2009, concert ticket sales in the US
tripled from $1.5 billion to $4.6 billion, according to Pollstar.Ticket prices and merchandise
become major sources of income for many popular rock stars like Lady Gaga,
Madonna, Bruce Springsteen and for bands like U2.

Apparently, “many fans will do (or
pay) almost anything to see them.”

If all these findings are accurate,
then it’s time for us to lobby our congressmen, demanding a 25% excise tax on
all entertainment productions.This was done in the 1950s, with fascinating results.

We currently pay Federal excise
taxes on gas, alcohol, tanning services, and will soon pay an excise tax on medical devices, so we should reinstitute an excise tax on
all areas of the entertainment industry since the industry players are wallowing in money. Similar proposals were suggested by John Nolte and Glenn Reynolds.

In the 1950s the excise tax was 20%; today it should be higher to account for inflation.Furthermore, the tax
should be levied on gross proceeds for all ticketed television
programming events, concert tickets, movie theater tickets, movies on demand,
and for good measure, music and video sales in every medium.

In addition to Federal excise taxes on
proceeds, individual celebrities should be taxed at a marginal tax rate of 91%, which according to economist Paul Krugman, also happened
in the 1950s.Just imagine
the sort of revenues that would be raised to support government spending!Celebrities would learn a lesson about theconstructive and destructive nature of
capitalism.

Furthermore, we should lobby our State
legislators to eliminate tax credits
for the movie and television industry. If the Democrats believe that oil and gas exploration companies don’t need tax credits, then I argue that neither does the extremely wealthy entertainment industry.

Here are some examples of State tax
credits benefiting the entertainment world:

New York:Moviemakers
get a 30% fully refundable tax credit on qualified expenses, as well as some
sale tax exemptions and up to 5% tax credit on investment in construction and/or
upgrades to facilities.

District of Columbia:No
funding yet, but they would like to give a 42% rebate on direct production
expenditures subject to D.C. tax, or a 21% rebate on expenditures not subject
to D.C. taxes, as well as a 30% rebate on qualified payroll expenditures.

California:Offers a tax credit of 20% or 25% against income and/or sales and use
taxes, based on qualified expenditures.

Florida:Production
incentives include a cash rebate program on in-state expenditures.There are 4 queues: 1) films, TV,
commercials, or music videos with expenditures in excess of $650,000 receive a
15%-22% rebate: 2) multiple commercials or music videos with minimum combined
expenditures of $500,000 and a $100,000 per project minimum receive a 15%-20%
rebate; 3) indies spending $100,000-$625,000 receive a 15%-17% rebate; and 4)
digital media projects receive a 10% rebate.

The great clarion call of this century
is to bring down the deficit in a balanced way.Removing unnecessary State tax credits would be
one small way to help.Federal excise taxes, however, would be the ultimate revenge
against an industry that voted for Obama.And the high marginal tax rate would be icing on the cake.

The Daily Kos argues that “trillions and trillions of
dollars [are] sitting on the sideline.” Certainly billions of dollars are
sitting in the bank accounts and assets of celebrities -- the ultimate one per
centers that populate a cult of personalities.

So, if you think the entertainment
industry should pay a heavy price for supporting the tax and spend policies of
this Administration, then I urge you to contact your Federal and State
legislators.

Frankly, it would be entertaining to
watch celebrities go into paroxysms of rage if legislators actually debated the
ideas presented here.If that
happens, Democrat celebrities will sing a different song about fairness.